Triple lock set to make pensioners better off than workers

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Many pensioners called for a reinstatement of the triple lock which would see a 10.1 percent increase to the state pension from April 2023. When Chancellor Jeremy Hunt delivered on this point in his Autumn Statement, it was widely viewed as victory for older Britons.

Now it seems increases to the state pension will continue to outpace wage rises, leaving older people with more flexible income than their younger counterparts.

This is according to findings by the Resolution Foundation.

The think-tank stated working-age households currently have £1,200 a year more in disposable income than pensioners.

However, by 2024, the pendulum is expected to swing in the other direction.

As the state pension continues to rise under the triple lock, pensioners should be guaranteed increases each year.

Younger working individuals will have to reckon with rising taxes, and for some, real terms pay cuts.

For example, according to the Office for National Statistics (ONS), wage growth in the year to September was six percent.

This is compared to the 10.1 percent rise pensioners will be guaranteed in the coming year.

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In just two years – in 2024 – the typical disposable income of an older person is set to rise to £24,300.

But the income of an average working-age household is forecasted to fall by £450 to £23,950, making a retired household typically better off. 

Sophie Hale at the Resolution Foundation acknowledged pensioners typically had lower disposable incomes than younger, working people.

However, she added: “The picture has changed recently.

“The triple lock has ratcheted up the value of the state pension, while working-age families have been buffeted by an unprecedented pay downturn and scaling back of income support.”

Before the announcement of the return of the triple lock, many charities and organisations stressed the need for higher pensioner incomes.

Age UK insisted that without the pledge, there would have “effectively” been a cut to the state pension in real terms.

Their website added: “At a time when we know many are struggling to afford to eat, warm their homes, and even pay for medicine and care, these cuts would’ve been devastating.”

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Chancellor Jeremy Hunt addressed what the return of the triple lock means for older people.

He said to the Commons: “In April, the state pension will increase in line with inflation.

“This is an £870 increase, which represents the biggest ever cash increase in the state pension.

“To the millions of pensioners who will benefit from this measure I say – now and always, this Government is on your side.”

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